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California's Plan to Tax Your Texts

The internet was abuzz these past few weeks over a controversial tax that came out of California – a “Texting Tax.” The California Public Utilities Commission proposed a tax that assessed a fee for texting that would add a fee onto Taxpayers' wireless bills. The reason? California officials said the tax would help to raise funds needed to support programs that make phone services more accessible to the poor. It was expected to raise as much as $44.5 million a year, but also had a clause that backdated charges as much as five years prior. In the end, the tax bill could have swelled to more than $220 million for consumers.

This "Texting Tax" hasn’t been without opponents – both the wireless industry and business groups were working hard to defeat the plan. The wireless industry feared losing its customers to similar free services, such as Facebook Messenger, WhatsApp, Apple’s iMessage, and Skype. In an effort to protect their consumers, industry executives argued that the state did not have legal grounds to impose such a tax.

California Regulators were scheduled to vote on this measure on January 10, 2019. However, a new FCC ruling now prevents the state from levying a tax on texting. The FCC has declared text messaging an information service vs. telecommunications service which limits state authority. As a result, the California Public Utilities Commission has withdrawn their proposal.